MACM Library - Exclusive

Credit in Todays Business Commerce

Irrespective of the industry sector that we do business in, we are often being faced with a hostile commercial environment. Who is in business knows well that in some industries, supply is exceeding demand and customers are becoming more knowledgeable and powerful. Customers are dictating the markets and those firms that are not meeting or exceeding customers’ expectations are indeed struggling. (March 2017)

Payments taking longer

Businesses in Malta will not be pleased to learn that the time it takes to get paid has not improved but has actually deteriorated, from 83.50 days to 91.67.
The Malta Association of Credit Management reported an increase of 8.17 days between the annual average for 2014 and 2015, which it measures as the Average Days Sales Outstanding (DSO).
The survey was conducted amongst its members: suppliers and service providers selling on credit in Malta, hailing from all sectors of the Maltese economy. (March 2016)

Financial Transparency from full disclosure

Trade credit does not come for free. It costs money and also carries an element of risk.
To ensure that customers requesting credit are trustworthy and can reasonably honour their commitments and pay their dues on time as agreed with their suppliers, the latter should analyse and evaluate the risks associated with the specific customers prior to granting them credit. (October 2015)

Urgent Changes Needed to Companies Act

The Malta Association of Credit Management (MACM) has long been highlighting the shortcomings that have emerged over the past 20 years since the Act was introduced, particularly those relating to the penalties and administrative sanctions applicable. It therefore commissioned a comparative overview of the local law with relevant UK legislation.
The MACM’s preliminary analysis of the overview identified both definitions that needed to be tightened up as well as changes to the remedies. (June 2015)

Company Directors Should be Well Regulated

THE RECENT EXPERIENCE OF A SUPERMARKET CHAIN: Lessons Learned?

The Maltese business community and the local media followed with great interest the recent experience involving a supermarket chain which evidently is in serious financial difficulty, leaving a number of creditors and suppliers in the dark about whether they shall be collecting their dues or writing them off.
The recent unfolding of events brought about memories of a major bankruptcy that happened around a decade ago following which we would assume that lessons would have been learnt by all. But in reality, one questions whether the local business community, regulators and authorities actually learned these lessons or not!
The Malta Association of Credit Management (MACM) was a catalyst in this recent episode. Being a not-for-profit organisation, without commercial interests and with the sole objective of providing a central national organisation for the promotion and protection of all credit interests pertaining to Maltese businesses, MACM reacted proactively as soon as it believed that there were signals of potential business collapse that could have a negative impact on a segment of its members. In this respect, a significant number of meetings with the various respective stakeholders were held to ensure that the interests of all the creditors, members of MACM, were meticulously and appropriately represented. (December 2014)

Cross-border debt recovery

"European businesses consider the European Union as a potential market for doing cross-border commercial transactions. This is due to the EU market size, the single market rules which result in less compliance costs and the absence of cross-border bureaucracy.
Notwithstanding the benefits, not all is rosy to conduct cross-border commercial transactions in the EU. Stark differences in culture, language and customers' attitudes and preferences may still exist, hence, hindering cross-border trade. But one of the biggest concerns of businesses is to recover cross-border debt from their respective customers." (June 2014)

Tackling Cash Flow Problems

"Clichés describing the importance of cash flow in managing a business are numerous. A cash flow problem can easily lead to business failure and a poor cash flow situation can happen to a business with sales bursting through its roof.
In Malta, we have experienced bankruptcies of businesses with high sales turnover who were nevertheless unable to meet their bills and pay their suppliers. Some of these cases are still fresh in the minds of suppliers who have never been paid and whose saga is still echoing in our courtrooms.
Poor cash flow management should not be taken frivolously because it can cause liquidity problems for the business community with a negative effect on the economy at large. Poor cash flow leads to late payment which very often has a domino effect in the economy." (January 2014)

Audit Reports - what about credibility and intergrity?

I always contend that trade credit is the oil that keeps the commercial wheel turning in an economy. But money costs money!
Credit does not come for free and although it may help suppliers to sell and maintain competitive advantage in the market,
it may carry a substantial element of financial risk to the supplier/trade creditor. (January 2014)

The Economic Update – December 2012 by Josef Busuttil

One can develop and work on a strategy or a business plan any time, but a New Year looms ahead of us like a clean sheet of paper, upon which we have the power to deliberately compose our achievements and successes ahead of time.
We are in that time of the year when instinctively we look back and analyse what went wrong, why it went wrong and what should have been done. Business owners and executives meet their peers and set objectives and strategies for the coming year with the aspiration that next year will be a better one! (January 2013)

The Economic Update – November 2012 by Josef Busuttil

“Getting paid from a customer is critical as it completes the sale that had been originally triggered by the sales team. But getting paid on time is not always possible. For many reasons, customers may delay payment and this delay in payment may negatively affect the cash flow and profit of the supplier in question.” (November 2012)

Managing Credit Effectively - Economic Update Sep12 Issue

‘It is unfortunate to note that few credit practitioners are aware of their contribution towards prompt paying customers…………..
…………… people employed in the credit function should be skilled and trained to strike a balance between the credit demands of the customers and the profit imperative of the firm’ (October 2012)

The Late Payment Directive

Following a European Directive to combat Late Payment in Commercial Transactions transposed into Maltese Law by Legal Notice 272 of 2012, earlier this year, BusinessToday speaks to Josef Busuttil, Director-General, Malta Association of Credit Management (MACM).
Click to read Full Interview. (August 2012)

Brand Equity: Credit Management Article

Investing in Brand Equity is becoming an effective business strategy not only to retain customers and maintain competitive advantage but also in securing sound cash flow to ensure better profit. Doing business in a hostile commercial environment, where late payment, payment defaults, bankruptcies, increase in operational cost, and most negative economic omens effecting us from abroad are the order of the day, firms should employ strategies by which they can build differentiated brand equity. (August 2012)

Economic Update Article: Getting Paid On time

An invoice may serve as an official record of the sale to a customer but from a credit management point of view, the main and sole scope of an invoice is to facilitate payment for the goods and services provided to the customer. This implies that an invoice should specify clearly the amount owed by the customer, by when it should be paid and to whom the payment should be made.
Good credit management practice suggests that a firm supplying goods or services to customers should assist its clientele to complete the sale by paying their dues on time. (June 2012)

The Name of the Game is to Secure Sound Cash Flow

SMEs The Trade Creditors

Figures confirm that SMEs are the backbone of our economy as in reality they represent the fulcrum that keeps the wheel of the economy turning but to what extent are SMEs being assisted to continue growing and creating more jobs that add value to the economy?
Attached please find full article. (April 2012)

Credit Management - Beyond our Shores

‘For those considering expanding their business overseas, one should be aware that export credit is more risky and expensive……..
……..Granting and extending credit carries an element of risk, the risk of customers paying late or not paying at all’ (March 2012)

Credit where credits due

“Late payment in Europe is a critical commercial stress for small and micro firms……
….. if the micro and small firms that represent the absolute majority of the Maltese business community, utilise the credit granted or extended by their suppliers wisely, it may well result in having a stronger economy in the future.” (March 2012)

CREDIT MANAGEMENT ARTICLE - The Credit Function in the 21st Century

No one in business denies that the commercial environment has changed. These changes have brought about a number of critical factors which have a direct impact on the operational activities of businesses debates Josef Busuttil
Please find attached full article (February 2012)

The Lifeblood of Business - The Economic Update (January 2012)

'Credit is the oil that keeps the wheel turning’ and ‘Cash flow is the lifeblood of a business’.
Having no commercial objectives, MACM strives to attain its corporate purpose through three critical routes:
a. Lobbying for a better credit environment in Malta;
b. Promoting good credit management practices with the local business community;
c. Providing the appropriate tools and pertinent credit information to its members in order to analyse and monitor the credit worthiness of customers in an efficient and cost effective manner.
Attached please find full interview featured on The Economic Update, January 2012.
Follow Josef Busuttil, Director General, Malta Association of Credit Management on The Economic Update. (January 2012)

Limited Liability has a price tag

Exempting companies from having to file audited accounts will hamper the economic recovery rather then assist it.
Limited liability, as far as corporate bodies are concerned, has always been a privilege – the privilege being that the entrepreneur can operate without the fear of losing his home or his personal assets. But everything has a price tag and this privilege also has to come at a price, and the price happens to be full disclosure of audited accounts.
Please find attached full article. (January 2012)

Strategic Cash Flow Management

Strategic Cash Flow Management
The Malta Business Weekly – Thursday, 5th October 2011
By Josef Busuttil
Director General
Malta Association of Credit Management
“When speaking about cash flow management, one would immediately think about the collection of money, late payments, Days Sales Outstanding, and bad debts. But sound cash flow management entails much more.
In this day and age, firms should develop their strategies in a holistic and comprehensive manner. All departments and business functions should contribute and work as one team. And the credit function is not the exception to this rule. The credit function is central to an organisation and has a lot to offer for the survival and long-term profit of a firm.
The role of the credit function is far from crunching numbers and making boring collection calls. An effective credit function’s role is that of meeting customers’ needs and demands. The credit practitioners should be those skilled people who strive to find ways of saying “yes” to profitable sales. They should be trained to gain and sustain competitive advantage in a turbulent business environment where customer loyalty does not exist any longer.”
Attached please find full article. (October 2011)

Interview with Josef Busuttil – Malta Association of Credit Management
By Christopher Sultana
The Malta Association of Credit Management is this year celebrating its 10th anniversary with a conference being held next month. In terms of credit management, however, the Association’s director general, Josef Busuttil, tells Christopher Sultana that unfortunately there has hardly been any improvement on late payments which remain a major concern for businesses.
Please find attached full Interview. (April 2011)

The right to charge interest on late payment in commercial transactions

“The Malta Association of Credit Management (MACM) is pleased to note that the European Parliament has approved the final text of a new directive on combating late payment in commercial transactions. The Directive 2011/07/EU, which has replaced 2000/35/EC, came into force on 16 February and Member States (including Malta) will have to transpose this law within two years.
Although there may be some anomalies in the amended Directive, MACM notes with satisfaction the EU concerns about the significant number of invoices that are being paid late. The EU Commission recognises that late payment negatively affects the cash flow of businesses, does not allow firms to invest in their business operation, limits competition and adversely affects the bottom line of firms with a severe consequence on the economy at large, especially in recessionary times as we are currently experiencing in Europe” (March 2011)

Responsible Credit Decisions

“……….customers requesting credit are encouraged to collaborate wholeheartedly with their suppliers when the latter ask for pertinent information. It is for their own interest to ensure that future financial commitments will be met.
But who works in the field of credit management in Malta knows well that the information required by the suppliers in order to analyse the credit worthiness of companies may be restricted or lacking.
Some companies are filing abridged accounts, which offer very limited data, while some other companies are completely ignoring the law and are not filing their accounts as they are obliged to. This matter is not only hindering good credit management practices but also encouraging commercial fraud when it comes to business investment and to granting trade credit, harming the economy at large.
MACM urges the Registrar of Companies to enforce penalties and take appropriate actions on companies failing to file their accounts as they are legally required to the benefit of all parties involved and our economy.” (February 2011)

Protecting our largest liquid asset

……….Trade Credit has evolved to become an integral part of our day-to-day business. For most local companies, accounts receivable or as we commonly refer to “debtors”, represent the largest liquid asset on their balance sheet, and habitually we are in danger of taking it for granted.
In real fact, very few invoices are actually being paid on due date or before and in some industries, accounts are overdue by more than 180 days. It is clear that late payment is a critical problem across all sizes and types of suppliers in Malta. (January 2011)

A New Years Resolution for Businesses

The year 2010 is coming to an end and this brings us to the time of the year when many people evaluate what went wrong or should have gone better during the year and aim to set goals and objectives for a more prosperous new year.
The year 2010 was not easy for businesses and commerce. We have witnessed a hostile international commercial environment. Big companies went bust, some economies were rescued by bail outs, governments announced hefty austerity measures followed by violent protests in the streets, and other countries are in the red and may ask for financial assistance soon. This economic and financial turmoil increased the unemployment rate in these countries with all its negative affects and consequences on businesses. (December 2010)

Legislate or educate?

On 20 October, the European Union voted in favour of a new Directive to combat late payment in commercial transactions within the EU market. This Directive will replace the existing Directive 2000/35/EC.
The scope of the European Commission and Parliament is to change the present business culture that of paying late for the supplies of goods and services received.
The new Directive does not apply for business-to-business transactions only but also for business-to-government dealings. Government departments and governmental organisations are cited as the worst payers in Europe and this piece of legislation may help suppliers to get paid from the government after 30 days. (November 2010)

Credit Management - the necessary evil function?

“Irrespective of the industry that we do business in, we are being faced by a hostile commercial environment. Who is in business knows well that in some industries, supply is exceeding demand and customers are becoming more knowledgeable and powerful. Customers are dictating the markets and those firms that are not meeting or exceeding customers’ expectations are struggling.
Besides, the products and the services that firms provide are becoming more and more homogenous with little scope for differentiation.”
MACM assists the Maltese business community selling on credit to act proactively when granting and managing credit, whilst gaining and sustaining competitive advantage in the market. (October 2010)

The credit function and its value for businesses

"When was MACM established and what is the ‘credit’ function?
The Malta Association of Credit Management (MACM) is this year celebrating its 10th anniversary. It was officially established in June 2001 with the main scope being that to provide a central national organisation for the promotion and protection of all credit interest pertaining to Maltese businesses.
Credit is involved when a firm sells its products or services and agrees with the customer to get paid at a later date. Therefore, credit can be described as the oil that keeps the wheel turning for businesses and the economy at large." (September 2010)

Give Yourself Some Credit

“Lifelong learning through education beyond school or university while at the same time learning ‘on the job’ will bring rewards both to the business community as well as to the individuals employed by these businesses.
The Credit Management function is by no means an exception. Business is changing, and therefore the way credit should be granted, managed, reviewed and controlled is also changing. More so, since credit has become an important element to gain competitive advantage in today’s dynamic business environment.” (September 2010)

The World Cup 2010 and the organisation of a business

I was waiting keenly for this year’s World Cup for two main reasons.
Firstly, it was being hosted in the African continent for the first time, where, in my opinion, the African countries are taking this game seriously and are playing good football. Hence, they deserve it.
Secondly, I couldn’t wait to admire the individual players who are renowned for their thrilling football actions. Those players coming from all over the world, who we usually follow them playing for big European football clubs such as Inter, Barcelona, Manchester United, Bayern Munich, and the rest.
After a whole month of football, the World Cup tournament is now over. Football supporters returned to their respective countries, leaving the South Africans in peace and better off. Thank God, the annoying sound of the vuvuzelas has gone silent. The Spaniards are enjoying the World Cup trophy. But many people like me are still disappointed at the poor performance of the renowned football stars. (July 2010)

Payment is in the Post!

“Late payment is a major concern for Maltese businesses. Statistics recently compiled by MACM - the Malta Association of Credit Management - show that although cheques returned unpaid are decreasing, thanks to the due diligence by the local banks, overdue accounts are on the increase. This scenario may affect the cash flow of businesses to the detriment of the Maltese economy at large.
To assist its members, MACM conducts a regular exercise across all industries to determine the DSO of every industry in Malta. The DSO Ratio - Days Sales Outstanding Ratio - is a tool widely used by businesses in all five continents to measure the performance of the credit management function. It represents the average time taken by customers in settling their invoices due to their suppliers. Hence, it is a good financial ratio for businesses to benchmark their credit performance with that of their respective industries.
The DSO Ratio varies widely from one industry to another and Malta is no exception, with 49.5 days for the telecom industry up to 179.3 days for the industrial equipment industry. The average DSO of the local market as a whole is 78.5 days.” (July 2010)

Managing the Credit Function in Todays Business World

To grant and manage credit is expensive and carries risk.
Statistics show that:
• 80% to 90% of B2B transactions involve payment at a later date and credit terms are often extended;
• Accounts Receivables (A/R) or as it is commonly known ‘Debtors’ is one of the largest liquid asset representing on average 40% of the total assets of an organisation;
• More customers are demanding and expecting credit from their suppliers. (May 2010)

Recession: Never again by Josef Busuttil

It is beginning to look as if the world is slowly hauling itself out of the deep pit of recession. Some countries and industries are in better shape than others, some further along the recovery road than others, and some even left with fewer anvils of debt hanging round their necks than others.
The cry that has gone up, however, seems to be the same all over the world, and Malta is by no means an exception - "Never again". (February 2010)

Fraudulent Behaviour by Josanne Cassar

We’ve all heard the stories. Someone sets up a business or company, entering into financial arrangements with third parties who are never paid. When the business fails, they declare bankruptcy leaving a trial of unpaid debts behind them… only to set up a new business and do it all over again. Josanne Cassar looks into the financial and legal issues of commercial fraud as well as the psychological profile of a typical fraudster
One cannot speak about commercial fraud in a vacuum; it has to be considered within the context of the economic climate in general.
Whoever is in business can affirm that one of the most difficult tasks in today’s business environment is that of getting paid on time, says Josef Busuttil, Director General of the Malta Association of Credit Management.
“Defaults in payments cause cash flow problems to businesses and make profits even slimmer. Credit does not come for free. The supplier has to manage it appropriately and find money to fund it somehow – usually by means of an overdraft, for which interest has to be paid. All this is to the detriment of cash flow, profit and the well being of the economy at large.” (January 2010)

Late payments hinders economic growth

People in business know well that in Malta, customers request long credit terms from their suppliers, sometimes running to 120 days – depending on the industry – and still fail to honour these credit terms by paying later than these agreed credit terms, or even worse issue post-dated cheques upon due date. Hence continue to benefit from the suppliers’ money.
In some industries, the Government is far from leading by example. Some local suppliers are owed substantial amount of money from the Government with the consequence that they are unable to restructure appropriately in order to face the new challenges and opportunities of today’s market demands. (November 2009)

The Key to Open the Door of Business Success

Delighted to note that economic indicators are showing positive signs of recovery after one of the worst international economic and financial turmoil, I still believe that businesses are not utilising their resources fully to face the new challenges of today’s commercial world.
Currently being faced by a business scenario characterised by oversupply, globalised intense competition, low profit margins, and low priced products from the Asian producers, most European businesses still fail to invest adequately in their employees and in R&D in order to find ways and means to gain and sustain competitive advantage. (October 2009)

Getting Paid on Time

“It has never been an easy task to get paid on time but recently getting paid (not necessarily on time) for the goods or services supplied is becoming increasingly difficult.
Agreed credit terms are not only being abused and dishonoured but also inconceivably stretched. Suppliers from certain industries are getting paid 180 – 210 days later than the agreed credit terms to the detriment of sound commercial cash flow, which sometimes make it unsustainable for the operations of businesses. (June 2009)

The EU Commission fights late payment by Josef Busuttil

On 17 July 1997, the European Commission published a Report on late payments in commercial transactions. This Report critically established that heavy administrative and financial burdens are placed on businesses, particularly small- and medium-sized enterprises (SMEs), as a result of excessive payment periods and late payment. (April 2009)

Reorganising the Credit Function by Josef Busuttil

When the economy booms, business organisations tend to be carried away by the positive results. They manage their resources less carefully and slow down - if not stop - when it comes to improving their systems and procedures on an ongoing process. The day-to-day busy operations deter them from seeking to be creative, innovative and sustain customer loyalty.
However, during a recession, when businesses are faced by less positive results due to lack in demand for their products and services, they panic. They try to implement half baked strategies, which I would rather refer to as short-term tactics, in order to find an urgent solution to the disturbing situation. (April 2009)

Get ready for the Credit Crunch!!

Credit is like a chain – one ring attached to another, and it has a domino effect. If the local suppliers lack adequate cash flow due to credit rationing, they would not be able to grant credit to their customers.
The light at the end of the tunnel to this situation may well be that to reorganising the credit management processes and procedures in order to minimise costs – in other words to being more effective and efficient in the granting and managing of credit.
The Malta Association of Credit Management has developed a Credit Management Wallchart to help businesses adopt an effective and efficient procedure to manage their credit.
To learn more, attached please find full article that has been featured on the Times of Malta on Thursday, 12th March 2009. (March 2009)

Effective Measuring Tools

In such an economic turmoil, that we are calling Credit Crunch, it is critical to measure the performance of the business functions in order to ensure effective management and efficient processes and procedures.
The credit department is one of the vital business functions, as it manages cash flow and therefore, effects the sustainability and profitability of the business organisation. Attached please find an article that may help you to measure the performance of the credit department. (March 2009)

The New Years Resolution for Businesses by Josef Busuttil

We are in that time of the year when instinctively we tend to look back to identify our successes and to analyse what went wrong and what were the relative causes. We try to establish what should have been done. Business owners and executives meet to set the business objectives for the coming year with the aspiration that next year will be a better one. (January 2009)

Innovation in the managing of credit by Josef Busuttil

The year 2008 was characterised by the record rise in oil price and the credit crunch. These had a negative effect on demand and consequentially on employment worldwide. To smooth down this economic turmoil, governments and central banks intervened by taking fiscal and economic measures in order to increase demand and instigate back the much needed "feel good" factor in the world economy. (December 2008)

Presentation - An Analysis of the Local Retail Credit Environment

Bounced Cheques - Banks take separate views

The two main commercial banks have reacted differently to comments by the Malta Association of Credit Management which recently claimed that the problem of dishonoured cheques bounced back. (March 2007)

Old problem bounces back

Two years after the banks introduced a voluntary code of conduct to curb the malaise of dishonoured cheques, the number of such cheques had actually increased, the Malta Association of Credit Management has said. (January 2007)

2006 credit management courses to start

The Malta Association of Credit Management (MACM) is currently receiving applications for the evening courses leading to certificate and diploma levels of the Institute of Credit Management Qualifications. Lectures will commence in October. (August 2006)

Effective cash collection through a positive attitude

Credit has become an effective marketing tool and an essential source of finance to many businesses and consumers. But, both the creditor and the debtor (the client) should be fully aware that credit is granted not only to make a sale possible but also to build and maintain a mutual long-term business relationship between the seller and the buyer, and this business relationship should justify the costs involved in credit. In other words, the creditor is investing money in the debtor and, as any other investment, it should be profitable. (June 2006)

Importance of detailed credit arrangements stressed

The authorities needed to ensure that new procedures on debt recovery were correctly followed by court staff, lawyer Reuben Balzan told the annual conference of the Malta Association of Credit Management on Tuesday. (May 2006)

Credit management education programme

Credit has become an important element to gain competitive advantage in today's dynamic business environment. Consequently, people employed at the credit department have an important role to play: "aiming to achieve high volume of profitable sales with possibly no or few bad debts and a sound cash flow management, while building a long-term business relationship with their clients." (September 2005)

Late Business Payment legislation seminar

Late payment in commercial transactions is considered as one of the main concerns of the Maltese business community. Some companies, across all sectors of the Maltese economy, are facing liquidity problems, which are evidently seen and remarked in their audited accounts. (September 2005)

Important element of Late Payments Directive missing from Maltese law

The director-general of the Association of Credit Management, Josef Busuttil, has complained that an important article of the EU's Late Payments Directive has been left out from Maltese legislation. (September 2005)

Pharmaceutical sector still at loggerheads with government

Malta’s pharmaceutical importers are still at loggerheads with government over the establishment of credit and interest terms, with some importers awaiting payment from government for goods delivered over a year ago. (September 2005)

Understanding cash flow

Cash flow and profitability are often misunderstood and confused – these two terms have totally different meanings. Most people think or associate poor cash flow with an organisation experiencing declining sales. But poor cash flow can happen to a business with sales bursting through the roof. (July 2005)

Late payments directive adopted at last

A legal notice to transpose the EU's Late Payments Directive will come into force tomorrow.
The notice was issued by the Prime Minister last week in terms of the Commercial Code and the European Union Act.
The late transposition of the directive had been a source of complaint by, notably, the Malta Association of Credit Management, and the EU had started infringement procedures against Malta. (June 2005)

Late payment directive could revolutionise economic scenario

An EU Directive on late payments in commercial transactions which has been adopted as law by the Maltese government could finally stop debtors from going to interminable lengths to settle payments.
The directive comes into effect tomorrow. (June 2005)

The cheque is in the post!

Legal notice 233 which amends the Commercial Code by transposing the EU's Late Payments Directive is a relatively short document with serious implications for the commercial community, especially those debtors who are overdue or who have been "trading" in the market simply by delaying payments due to their creditors. (June 2005)

Pressure for Malta to adopt late payments directive

The European Commission has drafted a "Reasoned Opinion" over Malta's failure to fully adopt the Late Payments Directive, the members of the Malta Association of Credit Management were told at their annual general meeting on Tuesday. (June 2005)

Credit management Average payment period in Malta worst in Europe

A recent survey of 45 large local companies from various sectors had shown the average payment period to be 113 days, one of the worst in Europe, a conference on credit management was told last week. (May 2005)

Fecma council holding Malta meeting

The council of Fecma, the Federation of European Credit Management Associations, will be holding its first Malta meeting tomorrow.
Items on its agenda include educational initiatives across Europe and lobbying the European Commission on credit management issues.
The meeting will be hosted by the Malta Association of Credit Management. (May 2005)

CD on the credit management function

The Malta Association of Credit Management is launching an informative and interactive CD consisting of useful tools and practical tips for the day-to-day running of the credit management function. (May 2005)

The European Union has opened an infringement procedure against Malta, giving the country formal notice that unless the directive on combating late payment in commercial transactions is transposed into law by the end of this month, an infringement situation would be declared. (April 2005)

Dishonoured Cheques

The Malta Association of Credit Management acknowledges that dishonoured cheques undermine the role of cheques as a reliable means of payment, thus constituting a destabilising factor for the viability and reliability of business and traders with all the negative repercussions for the economy. More so here in Malta, where cheques are still the most common method of payment, especially in the local business transactions, which transactions represent considerable amounts of money. (March 2005)

A step in the right direction

Everyone acknowledges that dishonoured cheques undermine the role of cheques as a reliable means of payment and constitute a destabilising factor for the viability and reliability of business and traders with all the negative repercussions for the economy. More so here in Malta where cheques are still the most common method of payment in this country, especially in local business transactions, which transactions represent considerable amounts of money. (February 2005)

Late payment in commercial transactions

On July 17, 1997, the European Commission published a report on late payments in commercial transactions which critically established that heavy administrative and financial burdens are placed on businesses, particularly small and medium-sized enterprises (SMEs), as a result of excessive payment periods and late payment. (February 2005)

The late Business Payment Directive – protecting the rights of the trade creditor

Everyone acknowledges the importance of having active and profitable businesses in an economy seeking growth.
But businesses do not live in a vacuum. They need to have the appropriate environment in which they can trade safely and profitably, hence increasing the economic activity of the country. They need to be supported with adequate legislation to create a level playing field for all the players in the economy. (January 2005)

The Ten Commandments for the Credit Department

We have just started a new year and at around this time, new business objectives and goals are set with the aim to improve on last year’s figures.
Admittedly, today’s rapidly changing business environment is becoming more demanding and more complex to forecast any gain of competitive advantage than ever before, and the business community have become more concerned about what drives value to the business and how to manage business risks. (January 2005)

New officials of FECMA

New officials have been elected to direct FECMA, the Federation of European Credit Management Associations, for the next two years. Mr. Josef Busuttil, administrator of the Malta Association of Credit Management, is one of the newly elected Vice Presidents of FECMA. (November 2004)

Investing in the Credit Department function

Many people argue that University graduates cannot hope for a well-paid managerial job until they have gained some experience in their chosen career path. That may well be true, but likewise experience alone cannot guarantee that well-healed position either.
Experience alone may not be adequate to maintain a position of responsibility and authority. Certainly, the combination of knowledge, skill, ability and experience is the best recipe for career success. (September 2004)

A first for Malta in the field of credit management

The Malta Association for Credit Management (MACM) is taking an ambitious step in organising a series of courses in this field which is considered to be an important first for Malta. Gerald Fenech spoke to MACM administrator, JOSEF BUSUTTIL, on the logistical details of these courses, the idea behind them and the opportunities that lie ahead in this important area (September 2004)

Enforcement of judgement is needed by the creditor

Bill 27 to amend the Code of Organisation and Civil Procedure has been approved through all stages by our parliament on Tuesday, 27th July 2004. It was a controversial bill and subject to fierce debate by various stakeholders. During the Parliamentary debate, members from both sides of the House urged the government to amend or to clarify various sections of the bill and at one point, the opposition has called on the government to suspend the debate for further consultations. As expected, the Chamber of Advocates had also proposed amendments to the bill. (August 2004)

MACM insists on late business payment legislation

More than two months have passed since Malta joined the EU, but Maltese creditors are still waiting for local legislation to conform with the EU Directive 2000/35/EC on combating late payment in commercial transactions, the Malta Association of Credit Management has complained. (July 2004)

Banks draft code of conduct to combat widespread use of dishonoured cheques

Dishonoured cheques - Banks agree code of practice

The Malta Bankers' Association has drawn up a code of practice for local banks on dishonoured cheques. The draft has been approved by the Central Bank of Malta and is under consideration by the MFSA.
The drawing up of the code followed insistance by the Malta Association of Credit Management (MACM) which had even called for legislation on dishonoured cheques, association administrator Josef Busuttil said. (June 2004)

The credit department in the current business environment

Credit Management from an EU Perspective

May 1, 2004 will be a critical day not just for the politicians but also for the business community in Malta. New legislation and practices will come into force and others will be introduced as we face challenges of the future.
To remain both effective and competitive in the market place, and to exploit new market opportunities, the Maltese business community should be fully aware of the implications and obligations that this new reality implies. We are not talking about our distant future any more, this should now be today's driving force of our corporate strategy! (April 2004)

Business failure by overtrading

Remarkable sales figures and improved short-term profits do not necessarily indicate ongoing success for a business.
Strange as it might seem, fast growth is not always sustainable and may damage the cash flow and the profitability of a business in the longer term, especially if the business is in its development stage, or if the business does not have the adequate resources to satisfy the increase in demand. (April 2004)

Proactive credit management - more than ever before!

Trade credit applications and requests for an extension of trade credit facilities increase when cash flow in the market suffers. It is commonly understood that the easiest and cheapest way to finance or to improve the cash flow of a business is by requesting more trade credit from the suppliers of that business. (March 2004)

The success lies in motivation and internal relationship

Credit managers from all over Europe complain that the commercial scenario is marred by a late payment culture, defaults in credit facilities, bartering, and mismanagement of finance and cash flow. This scenario gets worse as one moves to the south of Europe. A current example is the Parmalat case of Italy, which is being compared to the collapse of the US energy giant Enron. (March 2004)

Full financial disclosure and the Companies Act

Of course the Maltese economy needs to attract new investment both from the local market and from abroad! But investors will only put their money where they can reliably analyse and evaluate the risks involved, and forecast their expected return on the basis of standardised and comparable financial information. (January 2004)

Credit Agency dismayed with reduction of compliance levels for SMEs

Small and medium companies are no longer obliged by law to submit a full set of accounts at the end of each trading year much to the dismay of the Malta Association of Credit Management. (January 2004)

Healthy cash flow - The New Year Resolution?

Credit Association calls for national register of dishonoured cheques

The Malta Association of Credit Management is lobbying for the introduction of a national register which will record all dishonoured cheques issued on a daily basis. The MACM has drafted an Act to set up this register which will be accessible to the public in an attempt to prevent further fraud from taking place. Once a dishonoured cheque has been registered a notification will be immediately issued to all commercial banks advising them not to issue a cheque book account to whoever is responsible for issuing false cheques. (October 2003)

Credit Management in a European context

We are living in an era of economic and legal reform, trying to harmonise our business environmental factors with that of the EU to achieve the Union's objective of a "consistent" European market.
These radical developments may bring new challenges and opportunities to the Maltese business community. New entrants may well be attracted to the local market, increasing the current competition even further. But it may also create opportunities to the Maltese businesses to tap potential new market segments in the then enlarged EU market. (October 2003)

Prudence pays in credit granting

The limited liability concept is being abused of by the directors of some companies who deliberately or recklessly cause their companies to accumulate unsustainable debts through overtrading, lack of planning or even fraudulent objectives. (September 2003)

Credit-knowledge management

Following a number of bankruptcies in the retail sector, a slowing down of payments by customers in all areas of the economy, and a large number of dishonoured cheques being faced by the Maltese business community, more awareness of the need to manage information pertaining to credit management has been created. (August 2003)

Turnover is vanity profit is sanity

With the increasing competition faced daily by businesses both locally and from new international entrants, companies are forced to seek growth either from their existing markets or possibly try to target new markets through export or diversification.
Very often they strive to increase their sales turnover in a short period of time by reducing their prices down to the very 'bone' to attract more customers. And the more their turnover increases, the more they continue trying to sell. This macho attitude will often lead businesses away from their true objectives of profitability and shareholder's wealth. (August 2003)

Calls for more awareness on company recovery procedure

The Malta Association of Credit Management is calling on the authorities to provide more information to businesses about the recently enacted law that provides protection to companies that are facing financial difficulties. (August 2003)

EU directive empowers businesses to recoup debts

Businesses will be able to charge interest on credit thanks to an EU directive that will come in force once Malta becomes a EU member. According to the directive, stock will still be owned by the provider until payment is effected. The administrator of the Malta Association of Credit Management, Josef Busuttil, highlights the advantages and implications of the EU Late Payment Directive 2000/35/EC. By Christopher Sultana (July 2003)

Europe-wide coordination of credit management practices

Until the Maltese business arena experienced a number of bankruptcies in the retail sector, a slowing down of payments by customers and a large number of cheques which were being returned unpaid by the banks, credit management had been taken lightly by some Maltese business players. (June 2003)

MACM draft dishonoured cheques Act

Statistics compiled by the Malta Association of Credit Management from among its members reveal that between May 2002 and April of this year around 200 persons or entities issued more than three cheques each that were dishonoured. The amount of dishonoured cheques issued by these repetitive drawers amounted to more than 1,500 cheques.
To counteract this issue, the MACM has drafted a legislation to protect the payees from abusive personal cheques that are the most used method of payment in Malta, especially in the commercial transactions (May 2003)

Consensus on tackling the problem of dishonoured cheques

There existed a consensus on the need to tackle the problem of dishonoured cheques, Josef Busuttil, administrator of the Malta Association of Credit Management said.
He was reacting to the outcome of a seminar held by the association last week on the problem of dishonoured cheques. During the seminar, the association unveiled a draft law on dishonoured cheques which it intends to present to the authorities. (May 2003)

Seminar discusses problem of dishonoured cheques

Parliamentary Secretary Edwin Vassallo said yesterday the government was committed to working with the constituted bodies on legislation to solve or prevent problems arising out of the use of payment instruments such as the cheque book.
He was speaking at a well-attended seminar held by the Malta Association of Credit Management (MACM) which discussed the problem of dishonoured cheques. A draft bill entitled the Dishonoured Cheques Act was presented at the seminar. (May 2003)

The malaise of dishonoured cheques

Tackling Credit Problems

There is need for the enactment and enforcement of laws and regulations and also for a change in mentality if the prevailing credit problems are to be addressed effectively and efficiently.
That, in a nutshell, is the main message that emerges from an interview with the administrator of the Malta Association of Credit Management, Josef Busuttil. (March 2003)

Company Recovery Procedures - Some Questions

Bankruptcy and insolvency have always been the major concerns of the Maltese trade creditors. To date, a company which is unable to pay its debts may file bankruptcy without an adequate transition period, which is much needed to enable companies in such financial straits to try and recover, thus honouring their commitments to their shareholders, employees and creditors. (March 2003)

Call for Legal Provisions

Delayed payments are causing headaches to commercial companies
A call has been made for the Business Promotions Act to be amended in order to cover all commercial transactions, whether in the private or the public sector and irrespective of the size of the undertakings, in a bid to address the liquidity problems faced by Maltese companies (March 2003)

Late Payment of Commercial Debt

Late payment in commercial transactions is considered as one of the main concerns of the Maltese business community. Some companies, across all sectors of the Maltese economy, are facing liquidity problems, which are evidently seen and remarked in their audited accounts. (October 2002)

Disqualification of Directors

The relative ease with which limited liability companies may be set up in Malta, with a minimal share capital of Lm500, of which only Lm100 needs to be paid up, has made the protection of limited liability accessible to a large number of people. In reality, they may be unable or unprepared to assume the duties and responsibilities expected from Company directors, fail to exercise adequate management skills, and lack proper regard to the financial interests of the company’s creditors. (August 2002)

Should Drawers of Bounced Cheques get away without criminal prosecution?

Living in an electronic era, the commercial banks in Malta have been active in promoting and encouraging the use of electronic banking. Huge investments have been made by the banks, and their effort seems to be bearing fruit. People transacting through automated teller machines, and paying bills electronically from the comfort of their homes are becoming more acceptable and common. But despite the radical progression of electronic banking, cheques are still the most common method of payment in this country, especially in local business transactions, which transactions represent considerable amounts of money. (July 2002)

Creditors – Protect Your Cash Flow

The Maltese business arena is dominated by an unbalanced financial situation where suppliers, in all sectors of the economy, are paying high interest rates to their respective banks for their required loans and overdraft facilities. The loans or overdraft are extended sometimes beyond logical consideration since the need to win extra sales in a difficult market situation exceeds financial considerations. This results in exposed positions with resellers or customers, more often than not on an unsecured basis. (June 2002)

Overtrading & Distressed Businesses

Trade creditors coming from all sectors of the Maltese economy are being faced with an ever increasing number of distressed clients who are insolvent or have big cash flow problems. In some cases these customers are considering closing down their business. On the other hand, credit seeking new customers are emerging on the market, posing uncertainty both with their lack of experience in a new market environment and the managerial skills required to run their businesses profitably. (May 2002)

Close ties between the sales and the credit departments

The Maltese business scenario is marred by a late payment culture, defaults in credit facilities, bartering, mismanagement of finance and cash flow, late or non-filing of financial documents and an alarming increase in the number of dishonoured cheques. (March 2002)

Credit Information Management

Profitable Credit Limits

Every business organisation wants to grow continuously in profit and sales terms. Selling on a cash only basis is straight forward and carry no payment risks, but when sales are effected on credit, the customers should be analysed from all angles to evaluate their creditworthiness. It is better not to add up the sales figure than to have future problems to recover your money! (December 2001)

Developing an effective Credit Policy

All business organisations are subject to increasing levels of change, limited resources, and additionally they are experiencing shorter product life cycles. Markets are also becoming more competitive and the move from selling to relationship marketing (focusing on customer loyalty and building meaningful customer relationships) is on top of every successful organisation’s agenda. (November 2001)

Defeating defaulting Credit Facilities

Money costs money. Commercial credit facilities have become a serious concern to the Maltese business community especially when these grants were given verbally and without formal evidence. (November 2001)

Enhancing your Business / Competitive Intelligence

Competitive Intelligence provides the data, information and knowledge base that are required to apply a strategy and decision process effectively and professionally. Developing or re-organising a credit policy should be considered as one of the most critical management strategies in the Maltese business scenario. (November 2001)